LG Electronics reported a sharp fall in results from its mobile phone business in the first quarter, after it delayed the launch of its next flagship phone. Revenues fell 27.7 percent year-on-year to KRW 2.16 trillion, and smartphone shipments were down 23 percent to 11.4 million.
On a quarterly basis, shipments declined 18 percent. However, LG managed to improve its operating margin slightly versus Q4, to minus 6.3 percent from minus 7.4 percent, thanks to cost reductions. That's the fourth consecutive quarter of losses, after the mobile division last broke even at the operating level in Q1 2017.
LG said it expects the "intense market competition" to continue, amid weak smartphone demand and aggressive expansion by Chinese brands. The company still plans to launch a flagship model this year, as well as mid-tier and high-end phones, and will focus on optimising the portfolio to improve profitability.
At group level, LG reported first-quarter sales up 3.2 percent year-on-year to KRW 15.12 trillion, led by growth in home appliances and electronics. Operating profit recovered strongly, to KRW 1.11 trillion from KRW 922 billion a year ago, driven by a near doubling in the home entertainment division margin thanks to a focus on cost cuts and premium TVs. Net profit was down slightly to KRW 730 billion after losses on investments.
